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    Southeast Asia
     May 22, '13


SPEAKING FREELY
New spark in the South China Sea
By Julius Cesar I Trajano

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

In the latest complication of territorial disputes in the South China Sea, Taiwan has imposed diplomatic and economic sanctions on the Philippines. Taipei has rejected Philippine President Benigno Aquino's informal apology after the crew of a Philippine Coast Guard vessel shot dead a Taiwanese fisherman on May 9 in the Bashi Channel where the two countries' exclusive economic zones (EEZ) overlap.

Taipei has insisted instead that Manila offer compensation, apprehend the killer and launch joint fishery talks. Manila's failure



to meet those demands has prompted Taipei to flex its muscles, by suspending the hire of new overseas Filipino workers (OFWs), banning Taiwanese tourists from visiting the Philippines, conducting new naval drills in the disputed area, and recalling Taiwan's de facto envoy to Manila.

The Philippine government has only two viable options to make amends and appears to be weighing carefully the implications of each. The first option is to fulfill Taipei's demands, including making a public apology, that would defuse tensions and put relations back on a normal track. Such a compromise, however, might undermine Philippine sovereignty over its EEZ in the Bashi Channel.

It might also negatively impact the morale of the Philippine Navy and Coast Guard, both of which are religiously guarding the country's maritime domain against stronger and better-equipped rival claimants, including China. When Manila made a compromise at the height of its naval stand-off with Beijing in 2012, by some estimates it lost de facto control over the contested Scarborough Shoal.

The second option is to ignore at least temporarily Taipei's sanctions and demands, a position that would likely escalate rather than defuse the row. Apart from the freeze placed on hiring new Filipino workers, Taipei could move to deport all of the 87,000 Filipinos at present working in Taiwan. Despite strong economic growth, the Philippines has Southeast Asia's highest unemployment rate at 7%, while 10% of gross domestic product (GDP) is derived from overseas remittances.

While the deportation of Filipino workers may not be on Taipei's list of next punitive steps, particularly considering how much its high-end, export-oriented manufacturing firms now rely on skilled Filipino workers, thousands of new Filipino workers who were bound for Taiwan will be sorely affected by the hiring freeze order.

Taiwan President Ma Ying-jeou's uncompromising nationalist stance is not difficult to fathom as his approval rating has fallen to a dismal 21% in his second term. Aquino, on the other hand, is better positioned to make what would likely be considered an unpopular decision domestically after last week's sweeping election win for his political allies and with a personal popularity rating of 72%.

Nevertheless, how Manila eventually addresses the row is critical to its security. Manila earlier tried to take a face-saving middle way by apologizing for the incident behind closed doors. For Taiwan, however, it wants to Aquino to make a public apology. Yet if Aquino extends an official apology on behalf of the Philippine government to the Taiwanese government, there will likely be outcry from China, which still considers Taiwan a renegade province rather than independent country.

Manila's initial silence after the fatal incident should be understood in its wider political context. First and foremost, Manila's response intended to avoid a further escalation of the situation. Second, Aquino's administration was fully concentrated on the mid-term elections held on May 13.

Worker insecurity
One compelling reason for Manila to appease Taipei is the interests of OFWs. Aquino has to balance between defending Philippine territorial integrity and ensuring the safety and job security of its people working abroad whose remittances fuel the home economy. In the wake of the incident, there have been press reports that Filipinos in Taiwan have been harassed, discriminated against and subjected to physical violence, despite Ma's assurances that they will be protected.

While the Philippines does not have formal diplomatic ties with Taiwan due to its "One-China" policy, economic relations facilitated by the Manila Economic and Cultural Office in Taipei and the Taipei Economic and Cultural Office in Manila have been vibrant. Taiwan is the Philippines' fourth-largest source of remittances from Asia. In 2012, Filipinos working in Taiwan remitted US$168 million.

Economic sanctions imposed by Taipei could thus disrupt burgeoning trade and investment ties. In 2012, Taiwan was the Philippines' ninth-biggest trading partner and eighth-largest source of foreign investments. Philippine exports to Taiwan amounted to $1.9 billion, while Taiwan-Philippine bilateral trade volume reached $10.9 billion.

A travel ban on Taiwanese tourists could also adversely hit one of the Philippines' sunshine industries. Taiwan was the fifth-largest source of foreign tourists (216,511) to the Philippines last year. Observing the government's travel order, thousands of Taiwanese tourists have already cancelled their planned trips to the Philippines.

More importantly, the last thing that the Philippines needs is another heated rival in the South China Sea. China's perceived aggressiveness in South China Sea disputes has already consumed much of the Philippines' diplomatic resources and attention. Manila recently raised the stakes by submitting its disputes with Beijing to the International Tribunal on the Law of the Sea, a move China's leaders have categorically rejected.

With regard to Taipei's demand for the punishment of the alleged killer of the fisherman, Manila is weighing whether and how to launch an impartial and transparent investigation. Manila has already rejected Taipei's demand for a joint probe with Taiwanese authorities, claiming that such an exercise would be a violation of Philippine sovereignty.

Instead, both sides reached a consensus to initiate a "parallel probe" and to cooperate while conducting their respective investigations. It remains to be seen whether Taipei would accept the conclusion of Manila's probe should Philippine investigators uphold the "self-defense" version of events the crew of the involved coast guard vessel has put forward.

Manila could more easily meet Taipei's demand to conduct fishery talks. If successful, such talks could lead to joint management of marine resources in the disputed area and serve as a significant confidence-building measure. However, since any formal fishery agreement would violate Manila's "One-China" policy, it would need to be concluded informally.

To prevent future incidents, Taipei and Manila could also hold joint border patrol operations to replace the highly provocative naval drills and unilateral maritime law enforcement patrols that contributed to the recent fatal shooting. It is clearly in the interests of both Taiwan and the Philippines, two neighboring democracies and close allies of the US, to resolve amicably and quickly their current row.

Until then, Taipei will have the upper hand through its comparative economic leverage. While some Filipino economists have claimed that the economic costs of Taiwan's sanctions are insignificant, the lives and job security of tens of thousands of OFWs in Taiwan are at stake. If the reported attacks on OFWs mount while Manila weighs its next move, Aquino will find it increasingly difficult with domestic audiences to appease Ma's strong demands.

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing. Articles submitted for this section allow our readers to express their opinions and do not necessarily meet the same editorial standards of Asia Times Online's regular contributors.

Julius Cesar I Trajano is a senior analyst at the S Rajaratnam School of International Studies, Nanyang Technological University, Singapore.

(Copyright 2013 Julius Cesar I Trajano)


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